Tiles retailer Topps Tiles has revealed that a major shareholder has submitted a proposal to oust the firm’s chairman, Darren Shapland.
Served as a Requisition Notice by Lynchwood Nominees, on behalf of MS Galleon – which owns a 29.9% stake in the company, the proposal plans to replace Darren Shapland, Topps’ non-executive chairman and director of the company, while installing Lidia Wolfinger and Michael Bartusiak as non-executive directors.
MSG owns Cersanit, a major European producer of tiles, in addition to having a range of home improvement and tile retailing interests, primarily in the Polish market.
Topps first received a notification of shareholding from MSG in May 2020, stating that MSG had a 4.1% beneficial interest in the voting share capital of Topps. By November 2020, MSG had built its shareholding to 20%. During this period, the Company engaged in regular dialogue with MSG, in line with its stewardship practice with its other major shareholders. In this initial phase, Cersanit was a minor supplier to Topps.
During 2021, MSG approached Topps regarding the potential appointment of an MSG representative to the Board, and a proposal that Topps should purchase a greater proportion of its tiles from Cersanit. MSG has consistently set out its belief that the proportion of Topps’ tile supply purchased from Cersanit and its representation on the Topps Board should directly reflect its shareholding in Topps, which at that point was approximately 20%.
Topps did not consider this to be in the interests of shareholders as a whole and sought to engage with MSG to explain that the Company’s expertise in ranging, sourcing and procurement of tiles from a wide range of suppliers on a global basis is a core part of its competitive advantage and its iterative programme to develop and produce differentiated products that are innovative, of high quality and exclusive to Topps Group is a key strength of the Group.
MSG voted against the re-appointment of Darren Shapland as chairman of Topps at the 2022 AGM. The Topps board has “unanimously” rejected these proposals, which it believes present a clear conflict of interest between MSG’s objective for Cersanit to be a major supplier of Topps and the interests of all Topps shareholders. It is recommending that all shareholders vote against these proposals.
Darren Shapland, Non-Executive Chairman of Topps, said: “The Board strongly rejects these proposals, which it believes expose a clear conflict of interest between MSG’s objectives for Cersanit and the interests of all Topps shareholders. The Board welcomes the support received from our other largest shareholders, who have confirmed their intention to vote against the Requisitioned Resolutions at the AGM.”
Keith Down, Senior Independent Director of Topps, said: “The Board unanimously rejects these resolutions which it does not consider to be in the best interests of the Company and its shareholders as a whole. In proposing a resolution to remove the Chairman, who has led communications with MSG on behalf of the Board, MSG is seeking simply to strengthen its own position.”